Market Intermediaries and Services

Brokers are essential intermediaries in the securities market, facilitating buying and selling of securities on behalf of investors. This article will provide an in-depth understanding of who brokers are, their role, services offered, grievance redressal mechanisms, service timelines, and different types of brokers involved in the Indian stock market ecosystem

Meaning of a Broker:

A broker is a registered intermediary who acts as a link between investors and stock exchanges, executing trades on behalf of clients in return for a commission or brokerage fee.

Legal Definition (As per SEBI): Under the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992, a stockbroker is an individual or firm registered with SEBI and a stock exchange, authorized to buy and sell securities for clients.

Role of a Broker

• Facilitates buying and selling of stocks, bonds, commodities, and derivatives.
• Provides investment advice, research, and risk management solutions.
• Ensures compliance with SEBI, NSE, BSE, and MCX regulations.
• Helps investors in demat account opening and KYC verification.

Role of a Broker

Services Offered by Brokers

Brokers provide a range of services to cater to different investor needs. These services are broadly categorized as follows

Trading Services

• Execute buy/sell orders on behalf of clients in equities, derivatives, commodities, and currencies
• Provide access to trading platforms (mobile & desktop) for online transactions.
• Offer real-time market data, price alerts, and charting tools.

Research and Advisory

• Market analysis on stocks, mutual funds, and IPOs.
• Stock recommendations based on fundamental and technical research.
• Portfolio management advisory for high-net-worth individuals (HNI).

Demat & Account Opening

• Assist investors in opening Demat & trading accounts with depositories (NSDL/CDSL).
• Ensure KYC (Know Your Customer) compliance for regulatory requirements
• Offer nomination and transmission services in case of account holder’s death.

Margin Trading Facility (MTF)

• Allow investors to leverage funds for trading with margin-based loans
• Provide collateral pledging options for availing additional funds.
• Ensure compliance with SEBI margin funding regulations.

Mutual Fund & IPO Investments

• Facilitate direct mutual fund investments via trading platforms.
• Provide online IPO applications (ASBA facility) for primary market investments
• Enable Systematic Investment Plans (SIP) for long-term wealth building.

Account Management & Reports

• Issue contract notes for every trade executed.
• Provide portfolio statements and tax reports for capital gains calculations.
• Offer real-time profit and loss tracking dashboards.

Grievance Redressal Mechanism

Brokers must follow strict SEBI and exchange-mandated procedures for addressing investor complaints.

Steps to File a Complaint Against a Broker

1. Contact the Broker’s Customer Support:Investors should first report any issue (trade execution, fund withdrawal, etc.) to the broker’s grievance cell
2. Escalate to the Investor Grievance Cell of NSE/BSE: if unresolved, complaints can be lodged via the NSE/BSE investor grievance portal.
3. File a Complaint on SEBI’s SCORES Platform (https://scores.gov.in/): Investors can register complaints with SEBI for serious issues like fraud or unauthorized trades.
4. Seek Arbitration through Exchange Dispute Resolution Panels (SMART ODR): If the dispute persists, exchanges like NSE/BSE provide arbitration facilities.